The truth about business benefits realisation

Business benefits realisation for programs and projects should be tackled very early in their lifecycle. A concerted effort towards the management of business benefits realisation is key to the success of programs and projects.

Business benefits realisation (BBR) is a process which is sometimes practised, and often hypothesised about. However, the unfortunate truth is that more often than not, the business case proposition is not analysed post-program or post-project to verify whether the benefits are being realised, and to ascertain what happens if they are not.

The project perspective

The traditional role of the program or project manager is to deliver an outcome of some sort. The project manager is typically not tasked with identifying benefits, nor do they remain active in the program/project when the time arrives to harvest those benefits. The responsibility of harvesting the benefits is passed back to the business or, if pertinent, back to the program of which the project was a part.

It is imperative for the project manager to be cognisant of the benefits their project has set out to gain and, as such, all advanced project managers should be acutely aware of the benefits lifecycle and to know their role in that lifecycle.

A business story

Imagine this scenario: a business intends to invest capital in an idea that its management believes will improve efficiency and increase customer satisfaction, which will, in turn, generate new business. A business case is developed which focuses on the opportunities and is so well-structured that the financiers approve it to proceed. They hand this opportunity over to the program office to deliver but, to keep it tight, they set definitive time and financial constraints to prevent the project from squandering their profits.

The program and project team works incredibly hard to deliver and, with a few challenges along the way, they succeed. Everyone is happy; they have a post-implementation celebration and the product is handed over to the business to manage and maintain. All the business has to do to ensure that the profits will come rolling in is to keep the financiers happy and be certain that their staff is trained in the new product.

Morale is high and the executives want to move on to their next opportunity. However, the financiers stop them in their tracks by asking: ”Can you provide us with evidence proving your last investment is reaping the rewards you anticipated?”

The executives reply: “Well, the product was implemented on time and we didn’t waste any of the money you lent us, we have trained staff and happy clients utilising the system. We are paying you back the agreed amount, so that’s a proven success isn’t it?”

The financier replies “Yes, that sounds like a success story; however, we would like to see exactly how much more income your organisation is booking since the launch of your new product, and the percentage client growth this product has provided. If you can show us these figures, we will be happy to partner with you in this new venture. This new business case looks appealing.”

The executives think for a while before responding: “Yes, I’m sure we have that information somewhere; we will speak to our people and prepare a report for you. What does your calendar look like in two days? We can get something to you by then.”

And so it begins… the scramble to reverse engineer some random numbers and search high and low for the benefits.

A project manager’s story

“Right, let’s get the best team we have available and design this new product. We have a definitive completion timeframe and a set budget; I am certain we will make this happen.”

After a lot of hard work, long hours and stress, the product is delivered. However, we didn’t have enough time nor money so we only implemented 80% of the required functionality. But, hey, what a product! We met most of our delivery constraints. Well done to all; let’s have a celebration to share our success story.

Three months later, the project manager is in an interview for a new role. The interviewer asks the project manager: “Was you last project was a success?”

The project manager responds honestly: ”Yes, the product was implemented on time and we didn’t waste any of the budget. We developed a well-trained staff and there are happy clients utilising the system. That’s a success, isn’t it?”

The interviewer retorts, “Yes, that does seem impressive, but did the project reap the business benefit it set out to achieve?”

The project manager replies: ”That is not a project manager’s task, you know, to identify and then measure the benefits. That is what management is for. I am certain they have that data somewhere; surely we would have been told if it hadn’t met the benefits.” He didn’t get the new role.

True business benefits realisation

Businesses can and should measure their return on investment post program/project (throughout the lifecycle of the product) to verify a good or a bad decision as a result of the information provided to them in the business case, and to learn from their decisions.

Early in the life of the project, a benefits realisation plan should be created that details expected benefits of the project, and if relevant, how they align to the benefits of a parent program. It is important to consider both ‘hard’ business benefits as well as ‘soft’ benefits. Often it is easier to agree soft, intended benefits rather than hard numbers, which need not be financial numbers, for example it could include specific time saving improvements or percentage improvement in coverage of processes.

The program/project manager should own the benefits realisation plan throughout the life of the program/project, and transition it to a business owner at the appropriate time, to manage the benefits through the product lifecycle.
This is the concept of business benefits realisation.

Benefits can and should be documented in a plan, not just discussed. If the results are positive, well done: your decision-making processes are working and your forecasting techniques are sound. If the results are negative, you have a method of identifying exactly where you went wrong and the ability to rectify the process in order for this not to reoccur. If you cast your mind back to the second reason companies take on project management process, this would be a success, wouldn’t it?

How do you perform business benefits realisation?

The answer is simple: you plan for it and realise that it will take some time. As with any solid process, an organisational process, guidelines and template(s) should be available to assist staff in meeting corporate expectations.

The template is like a hybrid of a business case and a simple project plan. The focus is to flesh out the tangible benefits that will be ‘baked into’ future business plans, utilising the expected outcomes as a base and attributing an owner and hence a value to each benefit. It is crucial to identify real, tangible benefits, and not too many of them as too many benefits means too many things to track in future.

The business benefits realisation has its lifecycle which must be overseen by a senior staff member for management until completion. This is management to the end of the life of the product as per the business case, not the end of the project lifecycle.

The benefits will have a realisation timeline, and some may kick in earlier than others. This realisation schedule is monitored and measured by the overall business benefits realisation owner and each specific benefit owner. There may be KPIs for them to achieve. As each anticipated benefit has been realised, the actual value of the benefit is measured against the planned value to obtain a variance (if any) in value as proposed in the business case.

In order to do this successfully, a governance and reward process must be applied to the business benefits realisation. If a manager is remunerated on the basis of the success of his or her business benefits realisation process, s/he may actually pursue the benefits the project has delivered with enthusiasm. Common sense and strong business acumen should prevail when managing benefits.

In summary, the ultimate achievement of program and project success entails a great deal more than successfully delivering the investment initiative to meet time, cost and scope. It includes meeting the business benefits as proposed during the initial business case.

A well-written business case is essential, as is a structured approach to ensuring the benefits lifecycle is planned, measured and tracked to the end. This is not necessarily the domain of the program or project manager; however, the astute project manager should be aware of the benefits lifecycle and the relevance of their program or project to the success of their organisational strategic goals – and know how they can play their part in making it happen.

PM Oracles is Gareth Byatt, Gary Hamilton, Jeff Hodgkinson and Duke Okes, all experienced PMO, program, and project managers who share a common passion to help others and share knowledge about PMO, portfolio, program and project management.